Retail sales in Australia rose just 0.2 percent on the month in February, slowing sharply from an increase of 1.9 percent in January, while year-over-year growth slowed from 7.5 percent to 6.4 percent. Retail sales were relatively volatile in the previous three months, with officials noting factors that had made seasonal adjustment of the data more challenging, but today's data are in line with the modest growth seen over most of 2022.

Sales growth weakened for all of Australia's states and territories, with Australia's third most populous state, Queensland, recording a month-over-month decline. Sales rose at a pace faster than the headline rate of growth for department stores and for clothing and household goods but were relatively weak for household goods and other retailing.

The weakness in retail sales growth shown in today's data suggests that policy tightening by the Reserve Bank of Australia is weighing on consumer spending. The minutes of the RBA's previous meeting at the start of the month showed that officials had identified today's data as something that would"provide important additional information" when they"reconsider the case for a pause" at their next meeting, scheduled for next week. This weakness may strengthen the case for a pause after labour market data released earlier in the month had shown ongoing strength, though officials also noted that monthly inflation data, scheduled for release tomorrow, will also be assessed.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The Retail Business Survey covers all employing retail trade businesses who predominantly sell to households.

With consumer spending a large part of the economy, market players continually monitor spending patterns. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

Retail sales not only give you a sense of the overall picture, but also the trends among different types of retailers. Especially strong apparel or electronics sales can indicate strength in those industries, for example. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.